Council refinances $31 million in loans to access lower interest rate

DEBT: Council emended the 2020-21 budget at yesterday's meeting..
DEBT: Council emended the 2020-21 budget at yesterday's meeting..

SCENIC Rim Regional councillors yesterday amended the 2020-21 budget to allow them to take advantage of low interest rates by taking out a $15 million loan.

Mayor Greg Christensen said the amended budget would provide significant financial benefits and allow council to fund more capital projects.

"As part of the Queensland government's Local Government Debt Refinancing Program, council has been able to refinance $31 million of existing fixed loans that were held with Queensland Treasury Corporation to take advantage of historically low interest rates," he said.

"This initiative was put in place by the Queensland government to help stimulate the economy in response to COVID-19 impacts.

"Some of council's historic loans had interest rates of up to seven per cent, so being able to refinance our debt at a lower rate, that is fixed for the life of the loan, means we are able to use the savings in current debt service payments to leverage an additional $15 million in borrowings that can be allocated to fund eligible capital projects.

"This is a great opportunity for the region, and like most people with household mortgages, we've ensured we can lock in the lowest interest rates and free up additional cash for other benefits.

"Council will now assess how best to apply these additional borrowings to eligible capital projects that will bring strong long-term benefits to the region.

"It's important that every dollar we invest in capital generates socio-economic benefits for the Scenic Rim."

Cr Christensen said the ability for council to borrow more debt was also testament to strong governance and financial sustainability.

"As indicated in the recent Auditor-General's Local Government Report, we are on par or ahead of other rural and regional councils for our financial performance, and this is something we are proud of," he said.